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Departmental consideration for contract conditions

Variations for latent conditions

The tenderer is required to acquaint itself with the site and all physical conditions on the site or its surroundings. AS2124-1992 clause 12 defines latent conditions essentially as those physical conditions or artificial obstructions encountered on the site by the contractor during the execution of the work which:

  • differ materially from those which would have been ascertainable by the contractor
  • could not reasonably have been anticipated at the date of tender.

Latent conditions may relate to building works, services or sub-soil conditions.

Clause 12 then includes the notification procedures and conditions under which the contractor may obtain additional payment, via a variation, where such a latent condition is encountered.

Infection control during construction

This section applies to relevant health care facilities remaining occupied whilst alterations or new works are carried out.

During the construction, demolition or renovation of buildings, increased air-borne particles originating from dry soil, dust or fragmenting building materials, and exhausts and emissions from plant and equipment are common. These can be exaggerated by prevailing climatic conditions. Resultant air pollution can cause hazards and discomfort to patients, staff or visitors by:

  • increased particulate matter in breathing air - this is obviously important for patients with respiratory disease
  • conveying toxic substances, e.g. asbestos fibres
  • conveying an increased load of pathogenic micro-organisms, e.g. fungi. This has resulted in serious disease in some patients such as those who are immunocompromised.

The standing committee on infection control has drawn up the following interim recommendations in consultation with the Department of Health.

The infection control nurse (ICN), infection control committee (ICC) or infection control adviser (ICA) should be consulted at the time building construction, demolition or renovation is being planned. That is so that any infection control or other matter, which could affect patient care, is brought to the attention of the principal and the superintendent prior to work commencing.

The ICN, ICC or ICA should be advised of the date of commencement of building works and their anticipated duration. It is advisable for the consultant to consult with the facility's infection controller/s and the health care facility engineer or facility manager to provide appropriate protection.

The relevant points below should be incorporated in the contract for the works. These requirements do not cover other important matters to be considered, which may affect patient care such as noise pollution or vibration.

  • The contractor shall be responsible for suppressing all air pollution emanating from the work site and shall ensure construction activities cause minimal interference with the operation and function of the hospital.
  • The contractor shall provide construction barriers between the work site and the rest of the health care facility with particular attention to areas such as patient care areas, laboratories, clinical areas, kitchen and dining facilities. Air intake areas specifically are to be protected to ensure that buildings are kept free of contamination.
  • For construction / renovation areas inside hospital buildings, the contractor shall ensure that the air flow is directed away from adjacent patient areas where practical to do so and otherwise take steps to ensure contaminated air is not introduced into adjacent occupied areas.
  • The contractor shall ensure that goods and people traffic from construction and set-down areas are directed away from patient care areas as much as is practical.
  • The work site where it abuts occupied areas should be cleaned regularly; the intervals between cleaning should be based on the nature of the work and the need to minimise air pollution.

Working in custodial, forensic or secure facilities

For these situations, tenderers are to comply with additional requirements. These may extend to detailed briefings, inductions and instructions regarding site appearance, work methods, access, set down and storage areas and specialised requirements including the control of tools, utensils, equipment and materials that may serve to be used as weapons, escape means or for self harm. Full participation in the agency induction program is required.

Advance payment

Payments in advance for the provision of materials, plant and equipment is not usually undertaken. However, prepayment may be made where it is considered appropriate by the Superintendent and approved by the network / agency (e.g. deposit for specialised items requiring long lead times or imported items of equipment from overseas). Attention needs to be paid to ensure that:

  • prepayments are identified and adjusted in the progress certificate
  • additional bank security and / or insurance must be obtained in favour of the network / agency
  • insurance to cater for currency fluctuations is included.

Consultants to note: The provisions of AS2124-1992, clause 42.4. On particular projects, if payment is to be considered at any time during the construction period of the work, then alternate 2 must be adopted, with a modification to require additional security as per alternate 1.


All goods and materials (as well as services supplied under the contract), which are incorporated into the works, are subject to GST.

Industrial relations instruments

The Code of Practice for the Building and Construction Industry covers the permissible forms of industrial relations instruments in accordance with relevant federal and state awards. It needs to be emphasised that neither cash in hand payments nor pyramid sub-contracting are permitted.

The federal code of conduct shall also apply to applicable projects.

Other points to be detailed in the documents are in relation to site amenities for construction workers and the superintendent, first aid, safety, hearing protection, apprentices, worker compensation, long service leave, protective clothing, disputes procedure and allowances.

Permit systems

Agency specific permit systems or specific requirements need to be specified where works occur on functioning facilities. Permit approval systems should conform to the systems already in place for the facility and may cover:

  • hot work
  • penetrations in the structure, particularly in fire rated components
  • temporary disconnection of services where tappings and extensions are required or where necessary to ensure safe workingf methods.
  • visitor and / or security arrangements

Construction program and cash flow information

A construction program is to be provided by the tenderer and a copy is to be forwarded to the department and the network / agency.

This program should show:

  • duration time of the project
  • start and finish times for critical activities. This will form the basis for assessment by the superintendent of extension of time claims
  • monthly cash flow
  • allowances for expected delays such as seasonal weather conditions.

These items are to be updated as required during the project duration.

Site meetings

The contractor is to arrange for site meetings throughout the duration of the contract. It is recommended that these be held fortnightly. Copies of minutes of meetings are to be forwarded to the department's project manager.


A signboard providing project information shall be erected on the site of the works. The format and wording on the signboard shall be as prescribed in the ‘Construction Site Sign Boards' planning and development guideline or ‘Community Information Billboards' to the requirements of the Department of Premier and Cabinet and shall be submitted to the department for approval.

Liquidated damages and other scheduled sums

Careful consideration is required of the liquidated damages and provisional and other sums included in contract schedules. Liquidated damages in particular should be a justifiable pre-estimate of the damages likely to be suffered by the principal due to late delivery of the works by the contractor, and should not contain a penalty element.